CHAPTER 2

The Accountancy
Profession


A. Philippine Accountancy Act of 2004

1. Republic Act 9298 is known as the
A. Revised Accountancy Law
B. Revised Accountancy Act
C. Philippine Accountancy Act of 2004
D. Philippine Accountancy Law of 2004

2. Which of the following is not an objective of the Philippine Accountancy Act of 2004?
A. The standardization and regulation of accounting education.
B. The examination for registration of certified public accountants.
C. The supervision, control, and regulation of the practice of accountancy in the Philippines.
D. The development and improvement of accounting standards that will be generally accepted in
the Philippines.
3. The practice of Accountancy includes
I. Practice of Public Accountancy
II. Practice in Commerce and Industry
III. Practice in Education/Academe

A. I and II only
B. II and III only
C. I and III only
D. I, II, and III

Section 4 of RA 9298 provides that the practice of accountancy shall include, but not limited to, the
following:
a) Practice of Public Accountancy
b) Practice in Commerce and Industry
c) Practice in Education/Academe
d) Practice in the Government

4. CPA is in public accounting practice when he/she
 A. Represent his/her employer before government agencies on tax and other matters related to
accounting.
B. Represents his/her clients before government agencies on tax and other matters related to
accounting.
C. Teaches accounting, auditing, management advisory services, accounting aspect of finance,
business law, taxation, and other technically related subjects.
D. Holds, or is appointed to, a position in an accounting professional group in government or in
government-owned and/or controlled corporation where decision making requires professional
knowledge in the science of accounting.

5. Section 4 of the Rules and regulations Implementing RA 9298 (IRR) provides that any position in any
business or company in the private sector which requires supervising the recording of financial
transactions, preparation of financial statements, coordinating with the external auditors for the
audit of such financial statements, and other related functions should be occupied by a duly
registered CPA, It provides further that the business or company where such position exists has a

A. Paid-up capital of at least P5, 000,000 and/or an annual revenue of at least P10, 000,000.
B. Paid-up capital of at least P10, 000,000 and/or an annual revenue of at least P5, 000,000.
C. Paid-up capital and/or an annual revenue of at least P10, 000,000.
D. Paid-up capital and/or an annual revenue of at least P5, 000,000.


Section 4 of the IRR states that:
a) The business or company where such position exists has a paid-up capital of at least P5
million and/or annual revenue of at least P10 million.
b) The provision shall apply only to persons to be employed after the affectivity of the IRR.
c) The provide shall not results to deprivation of the employment of incumbents to the
position.

6. Which of the following statements concerning the practice of accountancy in the academe/education
is incorrect?
A. Members of the Integrated Bar of the Philippines are prohibited from teaching business law and
taxation subjects.
B. Members of the Integrated Bar of the Philippines may be allowed to teach business law and
taxation subjects.
C. The position of either the Dean or Department Chairman or its equivalent that supervises the
Bachelor of Science in Accountancy program of an educational institution is deemed to be in
practice of accountancy in the academe/education.
D. The position of either the Dean or the Department Chairman or its equivalent that supervises
the Bachelor of Science in Accountancy program of an educational institution must be occupied
only a duly registered CPA.







7. A CPA is in the practice of accountancy in commerce and industry when he/she
A B C D
1. Is involved in decision making requiring professional
Knowledge in the science of accounting Yes No No Yes
2. Represent his/her employer before government agencies
On tax and other matters related to accounting Yes No Yes No
3. Reminders professional service as a CPA to more than client
On a fee basis. No Yes No Yes

Section 4 (b) of the IRR states that Practice in Commerce and Industry – shall constitute in a person,
i. Involved in decision making requiring professional knowledge in the science of
accounting, as well as the accounting aspects of finance and taxation, or
ii. When he/she represents his/her employer before government agencies on tax and
other matters related to accounting, or
iii. When such employment or position requires that the holder thereof must be a certified
public accountant.

A CPA is in public accountancy when he/she renders his/her professional services as a CPA to
more than one client on a fee basis.

8. Section 5 of the Accountancy Act of 2004 states that the Board of Accountancy shall be composed of
a chairman and
A. 2 members
B. 4 members
C. 6 members
D. 8 members

9. The members of the Board of Accountancy shall be appointed by the
A. Philippine Institute of CPAs (PICPA)
B. Professional Regulation Commission (PRC)
C. President of the Philippines
D. Association of CPAs in Public Practice (ACPAPP)

10. If the PICPA falls to submit to the PRC its own nominees within 60 days prior to the expiry of the
Term of an incumbent, chairman or member of the Board of Accountancy (BOA), the
PRC in consultation with the BOA shall submit to the President a list of how many nominees for
Each vacant position?
A. 2
B. 3
C. 4
D. 5

11. A member of the BOA shall, at the time of his/her appointment, possess which of the following
Qualifications?
A. Must be a natural-born citizen of the Philippines.
B. Must be a Filipino citizen.
C. Must be a Filipino citizen and a resident of the Philippines.
 D. Must be a natural-born citizen and a resident of the Philippines.

According to Section 6 of the Accountancy Act of 2004, a member of the Board shall, at the time of
his/her appointment, possess the following qualification:
a) Must be a natural-born citizen and a resident of the Philippines;
b) Must be a duly registered Certified Public Accountant with at least ten (10) years of work
experience in any scope of practice of accountancy.
c) Must be of good moral character and must not have been convicted of crimes involving
moral turpitude; and
D. Must not have any pecuniary interest, directly or indirectly, in any school, college, university or
institution conferring an academic degree necessary for admission to the practice of
accountancy or where review classes in preparation for the licensure examination are being
offered or conducted, nor shall he/she be member Administration thereof at the time of his/her
appointment to the Board.

12. The Chairman and members of the Board of Accountancy shall hold office for a term of
A. 2 years.
B. 3 years.
C. 4 years.
D. 5 years.

13. According to Section 7 of the IRR, no person who has served two successive complete terms as
chairman or member of the Board of Accountancy shall be eligible for reappointment as chairman or
member until the lapse of
A. 1 year.
B. 2 years.
C. 3 years.
D. 4 years.

14. According to section 7 of the IRR, no person shall serve in the Board of Accountancy for more than
A. 3 years.
B. 5 years.
C. 10 years.
D. 12 years.

15. Which of the following is a function of the Board of Accountancy?
I. To prescribe and adopt the rules and regulations necessary for carrying out the
provisions of the Philippine Accountancy Act of 2004.
II. To supervise the regulation, licensure, and practice of accountancy in the Philippines.
III. To issue, suspend, revoke, or reinstate the certificate of registration for the practice of
the accountancy profession.

A. I and II only
B. II and III only
C. I and III only
D. I, II, and III

 Section 9 of Accountancy Act 2004 states that the Board of Accountancy shall exercise the following
specific powers, function and responsibilities:
a) To prescribe and adopt rules and regulations necessary for carrying out the provisions of the
Act;
b) To supervise the registration, licensure and practice of accountancy in the Philippines;
c) To administer oaths in connection with the administration of the Act;
d) To issue, suspend, revoke, or reinstate the Certificate of Registration for the practice of the
accountancy profession;
e) To adopt an official seal of the Board;
f) To prescribe and/or adopt a Code of Ethics for the practice of accountancy;
g) To monitor the condition affecting the practice of accountancy and adopt such measures,
rules and regulations and best practices as may be deemed proper for the enhancement and
maintenance of professional, ethical, accounting and auditing standards.
h) To conduct an oversight into the quality of audits of financial statements through a review
of the quality control measures instituted by auditors in order to ensure compliance with
the accounting and auditing standards and practices;
i) To investigate violations of the Act and the IRR;
j) To make such investigations as it deems necessary to determine whether any person has
violated any provision of the Act, any accounting or auditing standards or rules duly
promulgated by the Board as part of the rules governing the practice of accountancy;
k) To issue a case or desist order to any person, association, partnership or corporation
engaged in violation of any provision of the Act, any accounting or auditing standards or
rules duly promulgated by the Board as part of the rules governing the practice of
accountancy in the Philippines;
l) To punish for contempt of the Board, both direct and indirect, in accordance with the
pertinent provisions of and penalties prescribed by the rules of Court;
m) To prepare, adopt, issue or amend the syllabi of the subjects for examinations in
consultation with the academe, determine and prepare questions for the licensure
examination which shall strictly be within the scope of syllabi of the subjects for
examinations as well as administer, correct and release the results of the licensure
examinations;
n) To ensure, in coordination with the Commission on Higher Education (CHED) or other
authorized government offices than all higher educational instruction and offering of
accountancy comply with the policies, standards and requirements of the course prescribed
be CHED or other authorized government offices in the areas of curriculum, faculty, library,
and facilities; and
o) To exercise such other powers as may be provided by law as well as those which may be
implied from, which are necessary or incidental to carrying out of, the express powers
granted to the Board to achieve the objectives and purposes of the Act.

16. The Board of Accountancy shall elect a vice-chairman from among its members for a term of
A. two (2) years
B. one (1) year
C. three (3) years
D. five (3) years

17. According to Section 9(A) of the IRR, the commission, upon the recommendation of the Board, shall
create an auditing standard setting body to be known as the
A. Accounting Standards Council

B. Financial Reporting Standards Council

C. Accounting Standards Board

D. Financial Reporting Standards Board

18. According to Section 9(A) of the IRR, the Commission, upon the recommendation of the Board, shall
create an auditing standard body to be known as the

A. Auditing and Assurance Standards Council (AASC)

B. Auditing Standards and Practices Council (ASPC)

C. Auditing Standards Board

D. Auditing Standards Council

19. This standard setting body shall have a chairman who had been or presently a senior accounting
practitioner in any of the scope of accounting practice.

A. FRSC

B. AASC

C. PICPA

D. ACPAPP

20. This standard setting body shall have a chairman who had been or presently a senior accounting
practitioner in public accountancy.

A. AASC

B. FRSC

C. ACPAE

D. BOA

21. The Chairman and the members of the FRSC and AASC shall have a term of

A. 3 years

B. 5 years

C. 6 years

D. 7 years

22. Which of the following is not represented in the AASC?
A. Bangko Sentral ng Pilipinas
B. Board of Accountancy
C. Bureau of Internal Revenue
D. Securities and Exchange Commission

23. Who has the power to suspend or remove any member of the Board of Accountancy?
A. The Chairman of the FRSC
B. The Chairman of the PRC
C. The Chairman of the AASC
D. The Chairman of the Philippines

24. An applicants for the CPA licensure examination should be
I. A Filipino citizen
II. Of good moral character
III. A holder of the degree of Bachelor of Science in Accountancy
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

Section 14 of the IRR states that any person applying for examination shall establish the following
requisites to the satisfaction of the Board that he/she:
a) Is a Filipino citizen;
b) Is of good moral character;
c) Is a holder of the degree of Bachelor of Science in Accountancy conferred by a school,
college, academy or institute duly recognized and/or accredited by the CHED or other
authorized government offices ;
d) Has not been convicted of any criminal offense involving moral turpitude.

25. The following documents shall be submitted by applicants for the CPA licensure examination,

Except
A. Certificate of Live Birth in National Statistics Office (NSO) security paper.
B. Marriage contract in NSO security paper for married male applicants.
C. NBI clearance.
D. Transcript of records with, indication therein of date of graduation and Special Order number
unless it is not required,

Section 14 of the IRR requires applicants to submit to following:
a) Birth certificate in NSO security paper;
b) Marriage contract in NSO security paper for married female applicants;
c) College diploma;
d) Transcription of records;
e) NBI clearance;
f) Other documents that the Board may require.

26. Section 16 of the IRR states that to be qualified as having passed the licensure examination for
accountants, a candidate must obtain a
A. General average of seventy-five percent (75%), with no grades lower than sixty percent (60%) in
any given subject.
B. General average of seventy-five percent (75%), with no grades lower than sixty-five percent
(65%) in any given subject.
C. General average of seventy-five percent (70%), with no grades lower than sixty percent (60%) in
any given subject.
D. General average of seventy-five percent (70%), with no grades lower than sixty percent (65%) in
any given subject.

27. A candidate who obtains the rating of seventy-five percent (75%) and above in at least a majority of
the subjects shall receive a conditional credit for the subjects passed. He/she shall take an examination
in the remaining subjects within how many years from the preceding examination?
A. 1
B. 2
C. 3
D. 5

28. Any candidate who falls in two (2) complete CPA examinations shall be disqualified from taking
another set of examinations unless he/she has completed at least how many units of subjects given in
the licensure examination?
A. 4
B. 8
C. 16
D. 24

29. The Board of Accountancy shall submit to the PRC the ratings obtained by each candidate within
how many calendar days after the examination?
A. 1
B. 2
C. 5
D. 10

30. The Certificate of Registration issued to successful examinees
A. Is renewable every three years.
B. Is renewable every five years.
C. Shall remain in full force and effect until withdrawn, suspended or revoked in accordance with,
RA 9298.
D. Shall bear the signature of the PRC Chairperson and the two PRC Chairperson and the two PRC
Commissioners.

According to section 20 of the IRR, the Certificate of Registration shall:
a) Bear the signature of the Chairperson of the PRC and the Chairman and Members of the
Board of Accountancy.

 Stamped with the official seal of the PRC and of the Board of accountancy, indicating that the person
named therein is entitled to the practice of the profession with all the privileges appurtenant there
to;
b) Remain in full force and effect until withdrawn, suspended or revoked in accordance
with RA 9298.

31. The Professional Identification Card issued to successful examinees
A. Is renewable every three years.
B. Is renewable every five years.
C. Shall remain in full force and effect until withdrawn, suspended or revoked in accordance with
RA 9298.
D. Shall bear the signature of the PRC Chairperson and the Chairman and members of the Board of
Accountancy

Section 20 of the IRR provides that a Professional Identification Card bearing the registration
number, date of issuance, expiry date, duly signed by the Chairperson of the PRC, shall be issued to
every registrant. It provides further that the reissuance or renewal of the said card shall be subject
to payment of the annual registration fees for another and every after three (3) years thereafter.

32. The Board of Accountancy may reinstate the validity of a revoked Certificate of Registration after
The expiration of how many years from the date of revocation?
A. 1
B. 2
C. 3
D. 5

Section 25 of the IRR provides that the Board of Accountancy may, after the expiration of two (2)
years from the date of revocation of a Certificate of Registration and upon application and for
reasons deemed proper and sufficient, and after being convinced of applicant’s remorse and
rehabilitation, reinstate the validity of a

Revoked Certificate of Registration and in so doing may, in its discretion, exempt applicant from taking
another examination.

33. The following statements relate to the practice of public accountancy. Which is incorrect?
A. Single practitioners and partners of partnerships organized for the practice of public
Accountancy shall be registered CPAs in the Philippines.
B. A partnership engaged in the practice of public accountancy may be carried on in the form of
A general partnership (GP) but not a limited liability partnership (LLP).
C. A CPA is in public accounting practice when he/she represents his/her clients before
Government agencies on tax and other matters related to accounting.
D. The Securities and Exchange Commission shall not register any corporation organized for the
Practice of public accountancy.

Section 28 of the IRR provides that partnership engaged in the practice of public accountancy
may be carried on in the form of a general partnership (GP) or a limited liability partnership
(LLP).

34. Which of the following statements concerning ownership of working papers is incorrect?
A. All working papers made by a CPA and his/her staff in the course of an examination
remain the property of such CPA in the absence of any agreement (written or oral)
between the CPA and the client to the country.
B. Working papers include schedules and memoranda prepared and submitted by the client
of the CPA.
C. All working papers, except reports submitted by a CPA to his/her client shall be treated
confidential and privileged.
D. Working papers shall be treated confidential and privileged and remain the property of
the CPA unless such documents are required to be produced through subpoena issued by
any court, tribunal, or government regulatory or administrative body.



35. All registered CPAs shall obtain and used a seal which shall be circular in form with a smaller circle
within bearing the registrant’s name, registration number and title. Which of the following is correct?

A. Engraved in the lower portion of the space between the circles is the CPA’s name.
B. Engraved in the upper portion of the space between the circles is the CPA registration
Number.
C. Engraved in the middle of the smaller circle are the CPA’s name and registration number.
D. Engraved in the middle of the smaller circle is the CPA’s name.

Section 33 of the IRR states that the seal of a CPA shall be circular in form with a smaller circle within. In
the upper portion of the space between the circles shall be engraved the name of the individual CPA,
firm or partnership as the case maybe, the lower portion thereof shall be engraved the CPA registration
number of the individual CPA, proprietor of the firm and the signing partner of the partnership, and in
the middle of the smaller circle shall be engraved the letters “CPA’’.

The auditor’s reports shall be stamped with said seal, indicating therein his/her current
Professional Tax Receipt (PTR) number, date/place of payment when-filed with government
authorities or when used professionally.

36. Section 36 (Penal Provision) of RA 9298 states that any person who shall violate any of the
provisions of the Act or any of its implementing rules and regulations shall, upon conviction, be
punished by
A. A fine of not less than P50, 000.
B. Imprisonment for a period not exceeding two (2) years.
C. A fine of not less than P50, 000 or by imprisonment for a period not exceeding two (2) years.
D. A fine of not less than P50,000 or by imprisonment for a period not exceeding two (2) years,
Or both.

37. Which of the following is the accredited national professional organization of CPAs (APO)?
A. PICPA C. AASB
B. ASC D. FRSC

38. Tanya, Sam, and Jervi, CPAs, a newly formed partnership, applied for registration with the
Commission and the Board which was approved on June 30, 2012. The partnership should apply for
 Renewal of its registration on or before
A. September 30, 2014
B. September 30, 2015
C. December 31, 2016
D. June 30, 2015

39. Which of the following statements concerning the use of firm or partnership name is incorrect?
A. In the case of an individual CPA, he/she shall do business under his/her registered name
with the BOA and the PRC and as printed in his/her CPA certificate (for example, Juan
Puruntung, CPA).
B. In the case of a firm, it shall do business under its duly registered and authorized firm
name appearing in the registration documents issued by the Department of Trade and
Industry (DTI) and other government offices and such firm name shall include the real
name of the sole proprietor as printed in his/her CPA certificate (for example, Arnulfo
Gumamela and Associates).
C. In the case of registered partnership, it shall do business under its name as indicated in
its current Articles of Partnership and Certificate of Registration issued by the Securities
and Exchange Commission (SEC) (for example, Tanya, Sam, and Jervi, CPAs).
D. A CPA shall practice only under an individual, firm, or partnership name in accordance
with Philippine laws and shall not include any fictitious name but may indicates
specialization.

40. A partner surviving the death or withdrawal of all other partners in a partners in a partnership may
Continue to practice under the partnership name for period of not more than____ years after
Becoming a sole proprietor.
A. 1 C. 3
B. 2 D. 4

41. The death or disability of an individual CPA and/or the dissolution and liquidation of firm or
Partnership of CPAs shall be reported to the BOA not later than _____ days from the date of such
Death, dissolution or liquidation.
A. 15 C. 60
B. 30 D. 90
42. As defined in Annex “C’’ of the IRR, this refers to the inculcation, assimilation and acquisition of
Knowledge, skills, proficiency and ethical and moral values, after the initial registration of a
Professional that raise and enhance the professional’s technical skills and competence.
A. Professional Development
B. Continuing Professional Education
C. Continuing Professional Development
D. Professional Growth and Development

43. The PRC CPE Council shall assist the BOA in implementing its CPE program. Which of the following
Statements is incorrect concerning the Council’s composition?
A. The PRC CPE Council shall be composed of a chairperson and two (2) members.
B. The Chairperson shall be chosen from among the members of the BOA by the PRC.
C. The first member shall be the President or, in his/her absence or incapacity, any officer of the
Board of Direction of PICPA.
D. The second member shall be the President or, in his/her absence or incapacity, any officer if
 The organization of Deans or Department Heads of schools, colleges or universities offering
The degree requiring licensure examination.

44. The following statements relate to CPE credit units. Which is incorrect?
A. The total CPE credit units for registered accounting professionals shall be sixty (60) credit units
for three (3) years, provided that minimum of fifteen (15) credit units shall be earned in each
year.
B. Any excess credit units in one year may be carried over to the succeeding years within the three-
year period.
C. Excess credit units earned may be carried over to the next three-year period except credit units
earned for doctoral and master’s degrees.
D. One credit hour of CPE program, activity or source shall be equivalent to one (1) credit unit.

45. The following statements relate to the exemption from CPE requirements. Which is false?
A. A registered professional shall be permanently exempted from CPE requirements upon reaching
the age of 60 years old.
B. A registered professional applying for permanent CPE exemption is required to submit an
authentic or authenticated copy of his/her birth certificate or, If not available, his/her voter’s ID
or driver’s license.
C. A registered professional who is working or practicing his/her profession abroad shall be
temporarily exempted from compliance with CPE requirements during period of his/her stay
abroad provided that he/she has been out of the country for at least two years immediately
prior to the date of renewal.
D. A registered professional who is furthering his/her studies abroad shall be temporarily
exempted from compliance with CPE requirements during the period of his/her stay abroad
provided that he/she has been out of the country for at least two years immediately prior to the
date of renewal.
46. Which of the following statements concerning a CPA’s disclosure of confidential client information is
ordinarily correct?
A. Disclosure may be made to any party on consent of the client.
B. Disclosure should not be made even if such disclosure will protect the CPA’s professional interests in
legal proceedings.
C. Disclosure should be made only if there is a legal or professional duty to make the disclosure.
D. Disclosure may be made to any government agency without subpoena.

47. Listed below are names of CPA firms and pertinent facts relative to each firm. Unless otherwise
indicated, the individual named are CPAs and partners, and there are no other partners. Which is a
violation of the Implementing Rules and Regulations of RA 9298?
A. Tin, Ton, and Tan, CPAs (Tin died about five years ago; Ton and Tan are continuing the firm.
B. Poe and Que, CPAs (The name of Cua, a third partner is omitted from the partnership name)
C. Joni and Jona, CPAs (Joni died about three years ago; Jona continuing the firm as a sole proprietor).
D. Elias and Co., CPAs (The firm has ten other partners who are all CPAs).

QUALITY ASSURANCE REVIEW (QAR)

48. Which of the following has the power to conduct an oversight into the quality of audits of financial
statements through the review of the quality control measures instituted by auditors?
A. Bureau of Internal Revenue
B. Securities and Exchange Commission
C. Board of Accountancy
D. Insurance Commission

49. In the exercise of its power to conduct an oversight into the quality of audits, the BOA organized the
_______ Department of the Philippine Institute of Certified Public Accountants (PICPA) to conduct an
independent study, appraisal or review of the quality of audit of financial statements.
a. Quality assurance review
b. Quality control review
c. Independent quality assurance review
d. Independent quality control review
50. The operation of the Quality assurance Review Department (QARD) of the PICPA shall be supervised
by a/an
a. Executive Committee
b. Supervisory Board
c. Oversight Committee
d. Accountability Board

51. Which of the following is not a responsibility of the Executive Committee?
a. To set policies that will ensure effective implementation of the quality assurance review
program.
b. To monitor the quality of audits through its QARD
c. To recommend to the BOA a rolling Quality Assurance Review (QAR) plan for 3 years
d. To select the CPA practitioners to be reviewed for the year, in accordance with the three-year
plan

52. Which of the following is an incorrect statement concerning the term office of the Executive
Committee members?
A. Term office of the chairman and members shall be co-terminus with their respective term in
the BOA or PICPA unless replace earlier by the Board or PICPA
b. The term of office of the chairman and members in no case shall be more than 3 years
c. The chairman and members may continue to be in active practice of public accountancy
during their term, subject to certain restrictions and imposed by the Board
d. The chairman of the Executive Committee shall be from the Board’s appointees.

53. The head of the QARD who will be appointed by the Executive Committee is the
a. Chief inspector
b. Chief of Administration
c. Chief auditor
d. Chief quality assurance review

54. Which of the following is incorrect qualification of the Chief Inspector of the QARD?
a. Must have at least 5 years experience in the practice of public accountancy
b. Must be of good moral character
c. Must not have been found guilty of violating any professional, ethical and regulatory auditing
standards
d. Must have reached the level of senior manager or partner of an accounting firm that has
among its clients, publicly listed entities
55. Who is responsible for the non-technical aspects of the QAR program?
a. Chief inspector
b. Chief of administration
c. Assistant to the chief inspector
d. Chairman of the executive committee

56. The QAR covers all CPAs in
a. Public accounting
b. Government
c. Commerce and Industry
d. Education/Academe

57. Which of the following statements concerning enrollment in the QAR program is/are correct?
I. Enrollment in the QAR program under the prescribed category is a pre-requisite for
accreditation or renewal of accreditation as a CPA in public practice by the Board of Accountancy
II. The CPA practitioner’s registration category should be stated in the BOA certificate of
accreditation.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

58. CPA’s in public practice are required to register with the QAR program under the prescribed
category. Those whose clients are public-interest entitles (listed and not-listed but with the public
accountability) should register under
a. Category A
b. Category B
c. Category C
d. Category D

59. Public-interest entities included publicly-listed entities and not-listed entities but with public
accountability. The following are example of not-listed public-interest entities, except
a. Entities which have sold a class of their securities pursuant to a registration under Sec12 of
the Securities Regulation Code
b. Entities with assets of at least 50 million and having 200 or more holders each holding at least
100 shares of a class of its equity securities as of the first day of the issuer’s fiscal year
c. Entities which are in the process of filing their financial statements for the purpose of issuing
any class of instruments in a public market.
d. Entities which are not in the process of filing their financial statements for the purpose of
issuing any class of instruments in a public market.

60. There are rules to observe in connection with the registration of CPA practitioners with the QAR
program. Which is incorrect?
a. A CPA practitioner will register in only one category division
b. Change in a registration category is not allowed
c. Change in registration sub-category due to the change in the number of clients should be
done upon renewal of registration within the first two months of each calendar year
 d. All applications for registration must include information as to the number of clients classified
as to public-interest entities using full IFRS and SME entities using IFRS for SMEs

RULES AND REGULATIONS FOR THE ACCREDITATION OF ACCOUNTING TEACHER


61. What is the effectivity date of the BOA Resolution No. 88 (series of 2008) prescribing the rules and
regulations for the accreditation of accounting teachers?
a. June 4, 2008
b. June 20, 2008
c. December 31, 2008
d. June 30, 2008

62. Which of the following requirements for the accreditation of accounting teachers shall not apply to
those CPAs already engaged in teaching as of the effectivity date of the Rules and Regulations?
I. Possessions of relevant master’s degree
II. Completion of 12 units of relevant education subjects from the CHED recognized schools
III. A total of 3 years meaningful experience in actual accounting work either in public practice,
commerce and industry or government sector
IV. Proof that the CPA undergone Continuing Professional Education (CPE)

a. I and II only
b. II and III only
c. I and IV only
d. II only

63. The following statements relate to the requirement to complete 12 units of relevant education
subjects for the accreditation of accounting teachers. Which is incorrect?
a. For purposes of compliances, the 12 units may be earned from the undergraduate education
program or from a graduate degree program of any Higher Education Institution (HEI) duly recognized
by CHED
b. The 12 units may be earned from in-service or in-house trainings on relevant education
subjects offered by schools or training centers
c. The 12 units be combination of in-service trainings and units earned in an undergraduate or
graduate education program
d. CPAs who have passed the Teachers Board Exams are licensed professional teachers should
earn 12 units through in-service or in-house trainings

64. Which of the following shall be considered proof of compliance with the CPE requirement for
accreditation of accounting teachers?
I. Certification of CPE units from accredited CPE providers issued by the PICPA
II. Certificate of attendance or other proofs of meaningful participation in other CPE programs as
approved by the PRC/CPE Council upon recommendation of the PICPA of the individual CPA of a
minimum sixty (60) credit units earned for the past immediate 3 years.

a. I only
b. II only
c. Either I or II
 d. Neither I nor II

65. What is the required minimum number of CPE credit units that an accounting teacher shall earn in
each year prior to renewal of accreditation?

a. 15 units
b. 20 units
c. 10 units
d. No minimum number of credit units required

66. The Certificate of Accreditation issued by the PRC to an accounting teacher shall
A. Be valid for 2 years and renewable every 2 years
B. Be valid initially for 3 years and renewable annually
c. Remain in full force and effect unless revoked, cancelled or withdrawn
D. Be valid for 3 years and renewable every 3 years

67. According to the transitory provision of BOA Resolution no 88 any tenured/full load faculty member
who does not meet the accreditation requirements as of the effectivity date of the Rules and
Regulations may be issued a Provisional Accreditation. Choose the correct statement.
I. The Provisional Accreditation will be valid for a period not exceeding 3 years unless earlier
withdrawn, revoked or cancelled for cause by the BOA.
II. The Provisional Accreditation may be issued only once and is not renewable.
III. The transitory provision shall also apply to returning teachers who have not been teaching
for the last 5 years.

a. I only
b. I and II only
c. II and III only
d. I, II, and III

DIFFERENT GOVERNMENT AGENCIES THAT INFLUENCE THE PRACTICE OF ACCOUNTANT

68. Which of the following is responsible for the registration of corporations and partnerships, as well as
monitoring of compliance with the Corporation Code, Civil Code provisions on partnerships, Foreign
Investment Act, and other related laws?
a. Bangko Sentral ng Pilipinas (BSP)
b. Securities and Exchange Commission (SEC)
c. Bureau of Internal Revenue (BIR)
d. Philippine Stock Exchange (PSE)

69. Which of the following laws/regulations govern the registration of corporations and partnerships
with the SEC?
a. Civil Code
b. Corporation Code of the Philippines
c. Securities Regulation Code
d. a, b, and c

70. Which of the following entities need not be registered with the SEC?
 a. Sole proprietorship
b. General and Limited Partnership
c. Stock Corporations
d. Non-stock Corporations

71. The SEC is composed of a chairperson and four (4) commissioners appointed by the President of the
Philippines for a term of
a. 3 years
b. 6 years
c. 7 years
d. 8 years

72. The following statements relate to the qualifications of the SEC commissioners. Which is incorrect?
a. The commissioners must be natural-born citizens of the Philippines
b. The commissioners must be of good moral character, of unquestionable integrity, of known
probity and patriotism, and with recognized competence in social and economic disciplines
c. The majority of the commissioners, including the Chairpersons, shall be members of the
Philippine Bar.
d. The Chairpersons and commissioners must be at least thirty five (35) years of age.

73. Section of 8.1 of Securities Regulation Code (SRC) provides that securities shall not be sold or offered
for sale or distribution within the Philippines without a
a. Registration Statement
b. Register of Securities
c. Certificate of Accreditation
d. Certificate of Registration

74. The following securities are exempted from the registration requirement under subsection 8.1 of the
Securities Regulation Code (SRC), except
a. A bank own shares of stock
b. Any securities issued or guaranteed by the Government of the Philippines
c. Any securities issued by the government of any country with which the Philippines maintains
diplomatic relations on the basis of reciprocity
d. Any security or its derivatives, the sale or transfer of which by law, is under supervision and
regulation of the Office of the Insurance Commission, Housing and Land Use Regulatory Board, or the
Bureau of Internal Revenue.

75. The following transactions are exempted from the registration requirement under subsection 8.1 of
the Securities regulation Code (SRC) except
a. The distribution by a corporation, actively engaged in the business in the authorized by its
articles of corporation, of securities to its stockholders as a stock dividend.
b. The sale of securities by an issuer to more than twenty (20) persons in the Philippines during
any 12- month period.
c. The issuance of bonds and notes secured by mortgage upon real estate or tangible personal
property where the entire mortgage together with the bonds or notes secured thereby are sold to a
single purchaser at a single sale.
d. Brokers transaction, executed upon customer’s orders, on any registered exchange or
another trading market.
Under Subsection 10.1 of the SRC, exempted, from the registration requirement is the sale of securities
by .an issuer to fewer than twenty (20) persons in the Philippines during any 12-month period.

76. Rule 68 of the Securities Regulation Code (SRC) prescribes the requirements applicable to the form
and content of financial statements to be filed by stock corporations except those whose paid-up capital
is less than
A. P500, 000
C. P250, 000
B. P50, 000
D. P400, 000

SRC Rule 68, as amended, prescribes the form and content of financial statements required to be filed
with the Securities and Ex-change Commission (SEC) by corporations which meet the following
thresholds: a) Stock corporations with paid-up capital stock of P50,000 or more; b) Non-stock
corporations with total assets of P500,000 or more, or with gross annual receipts of P100,000 or more;
c) Branch offices of stock foreign corporations with assigned capital in the equivalent amount of
P1,000,000 or more; d) Branch offices of non-stock corporations with total assets in the equivalent
amount of P1,000,000 or more; e) Regional operating headquarters of foreign corporations with total
revenues in the equivalent amount of P1,000,000 or more.

77. The audited financial statements to be filed with the SEC shall be accompanied by a
A. Management Report
B. Registration Statement
C. Statement of Management's Responsibility for Financial Statements
D. Statement of the Board-of Directors' Responsibility for Financial Statements

The SEC requires management of all corporations covered by SRC Rule 68, as amended, to acknowledge
their responsibility for their financial statements. Hence, the financial statements to be filed with the
SEC shall be accompanied by a Statement of Management's Responsibility (SMR) for Financial
Statements.
78. The Statement of Management's Responsibility to accompany the financial statements to be filed
with the SEC shall be signed by the
I. Chairman of the Board of Directors
II. Chief Executive Officer
III. Chief Financial Officer
A. II and III only
B. I only
C. I and II only
D. I, II, and III

SRC Rule 68, as amended, prescribes the wording of the SMR that shall be attached to the financial
statements.
Part I, Section B (ii) of the Rule states that the SMR for Financial Statements that shall be attached to the
financial statements shall read as follows:
STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS The management of
(name of reporting company) is responsible for the preparation and fair presentation of the financial
statements for the year(s) ended (date), in accordance with the prescribed financial reporting
framework indicated therein. This responsibility includes designing and implementing internal controls
relevant to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies,
and making accounting estimates that are reasonable in the circumstances.

The Board of Directors or Trustees reviews and approves the financial statements and submits the same
to the stockholders or members.

(name of auditing firm), the independent auditors, appointed by the stockholders has examined the
financial statements of the company in accordance with Philippine Standards on Auditing, and in its
report to the stockholders or members, has expressed its opinion on the fairness of presentation upon
completion of such examination.
Signature_________________________________________
Printed Name of the Chairman of the Board ___________________________
Signature_________________________________
Printed Name of the Chief Executive Officer ___________________________
Signature______________________________
Printed Name of the Chief Financial Officer __________________________________

The SMR of the entities covered under Part II of the SRC Rule 68, as amended, shall be signed under
oath.

79. In addition to the requirements prescribed under Part I of Rule 68, as amended, Part H of the Rule
prescribes special requirements on the financial statements required to be filed with the SEC by

I. An issuer which has sold a dass of its securities pursuant to a registration under Section 12 of the SRC.

II. An issuer with a dass of securities listed for trading on an Exchange.
III. An issuer with assets of at least PS0,000,000 and has 200 or more, holders, each holding at least 100
shafts of a class of its equity securities as of the first day of the issuer's fiscal year.

A. I only
B. II only
C. II and III only
D. I, II, and III


80. The financial statements to be filed with the SEC shall be presented in comparative form. The
audited balance sheets or statements of financial position shall be as of the end of each of the most
recently completed fiscal years.
A. 2
B. 3
C. 4
D. 5

81. SRC Rule 68, as amended, requires a regulated entity to report to the SEC its action on a report of its
independent auditor pertaining to any material findings involving fraud or error within business days
from the date the report is submitted by the independent auditor.
A. 2
 B. 3
C. 4
D. 5

A regulated entity shall report to the SEC its action on a report of its independent auditor pertaining to
the following:
1) Any material findings involving fraud or error;
2) Losses or potential losses the aggregate of which amounts to at least 10% of the consolidated total
assets of the company;
3) Any finding to the effect that the consolidated total assets of the company, on a going concern basis,
are no longer adequate to cover the total claims of creditors:
4) Material internal control weaknesses which may lead to financial reporting problems.

Rule 68, as amended, prescribed the form of port of SEC' within findings to be submitted by the
regulated entity to the 5 business days from the date the report is submitted by the independent
auditor.
82. If a regulated entity fails to submit the required report of its action concerning any of the at findings
specified in Rule 68, as amended, the independent auditor shall, within_____ business days from the
submission of his findings to the entity, file a report to the SEC.
A.10
B. 15
C.20
D.30


83. According to Part II of Rule 68, as amended, the Rule considered violated if the auditor's opinion the
financial statements of listed entities or other ISSUO'S of senates to the public is other than unqualified
because of
I. Deviation(s) from the required financial reporting frame-work.
II. A scope limitation imposed by the company.
A. I only
B. II only
C Either I or II
D, Neither I nor II

BANGKO SENTRAL NG PILIPINAS (BSP)

84. The primary objective of this grimmest agency is to maintain price stability conducive to a balanced
and sustainable economic growth. It also aims to promote ad preserve monetary stability and the
convertibility of the peso.
A. Bureau of Internal Revenue (BIR)
B. Securities and Exchange Commission (SEC)
C. Philippine Deposit and Insurance Corporation (FDIC)
D. Bangko Sentral ng Pilipinas (s')

85. Which of the following is not a function of the Bangko Sentral ng Pilipinas (BSP)?

A. Recommend measures to improve the efficiency and effectiveness of government operations.
B. Supervise banks and exercise regulatory powers over non-bank institutions performing quasi-tart
functions.
C. Determine the exchange rate policy of the Philippines
D. Extend discounts, loans, and receivables to banking institution for liquidity purposes

To recommend measures to improve the efficiency and effectiveness of government operations is one
of the principal duties les of the Commission on Audit (COA).

86. The powers and functions of the BSP shall be exercised by the

A. Ware of Directors
B. Monetary Board
C. Board of Trustees
D. BSP Governor
.

87. The BSP Monetary Board is composed of seven (7) members appointed by the President of the
Philippines for a term of
A. 6 years
B. 5 years
C. 7 years
D. 3 years

Section 6 of the New Central Bank Act (RA 7653) states that the powers and functions of the BSP shall
be exercised by the BS? Monetary Board composed of seven (7) members appointed by the President of
the Philippines for a term of six (6) years.

88. The seven (7) members of the Monetary Board are

A. The BSP governor, a member of the cabinet to be designated by the President of the Philippines, and
five (5) members from the private sector.
B. The BSP governor and six (6) members from the private sector.
C. A cabinet member and six (6) members from the private sector.
D. The BSP governor, 2 members of the cabinet to be designated by the President of the Philippines, and
four (4) members from the private sector.

89. The internal auditor of a universal or commercial bank
I. Should be a CPA.
II. Must haw at least five (5) years experience in the regular audit (internal or external) of a universal or
commercial bank as auditor-in-charge, senior auditor, or audit manager.

A. I only
B. II only
C. Neither I nor II
D. Both I and II
The internal auditor of a universal or commercial bank must be a CPA and must have at least five (5)
years experience in the regular (internal or external) of a universal or commercial bank as auditor-in-
charge, senior auditor, or audit manager. He/She must be competent to examine all areas in which the
institution operates.

90. In its Circular No, 245, Series of 2000, the BSP requires that only external auditors accredited by the
BSP shall be engaged by bares for regular audit or special engagements. Which of die following is not an
accreditation requirement for external auditors?
A. No external auditor may be engaged by a bank if he/she had or was committed to-acquire any direct
or material in-cited financial interest in the bank, or if his/her independence is considered impaired
under the circumstances specified in the Code of Professional Ethics for CPAs.
B. The external auditor and the members of the audit team do not have/shall not have outstanding
loans or any credit accommodations (including credit card obligations) with any bank to be audited /
being audited at the time of signing the engagement and during the engagement.
C. The external auditor should have at least five (5) years track record in conducting external audit.
D. The external auditor and members of the audit team adhere to the highest standards of professional
conduct, including integrity and objectivity.

The requirement that the external auditor and the members of the audit team do not have / shall not
have outstanding loans or an credit accommodations with any bank to be audited / being audited does
not include credit card obligations. The other accreditation requirements are as follows:

a. The external auditor must have at least twenty (20) existing corporate clients, with resources of P50
million each; and

b. The external auditor must have at least one (1) existing diem commercial bank in the regular audit or
in lieu thereof, the external auditor and the auditor who will head the team must have at least five (5)
years experience in the bank audit.

91. One of the documents that should be submitted by an auditor who is applying for BSP accreditation
is a Certification from the Professional Regulation Commission (PRC) that the external auditor and the
members of the audit team have no derogatory information, previous conviction or any pending
investigation. However, in the event that the certification cannot be obtained because of the pendency
of a case, the BSP may dispense with this requirement if the case

A. Involves purely legal question.
B. Does not, in any way, negate the auditor's adherence to the highest standards of professional conduct
and degrade his/her integrity and objectivity.
C. Either A or B.
D. Neither A nor B.

Section 3(i) of BSP Circular No. 245 dated May 25, 2000, It amended by Circular No. 318 (Series of 2002)
which states that in the event the PRC Certification cannot be obtained because of the pendency of a
case, the BSP may dispense with this requirement upon determination by the Monetary Board that the
case involves purely legal question, or does not, in any way, negate the auditor's adherence to the
highest standards of professional conduct and de-grade his/her integrity and objectivity.

92. Which of the following cases that may be discovered by a Bangko Sentral ng Pilipinas (BSP)
accredited external auditor during his/her audit fieldwork must be reported to the BSP?

I. Any material finding discovered during the period of audit involving fraud or dishonesty (except cases
that were re-solved during the audit period).
II. Adjustments or potential losses, the aggregate of which amounts to at least 1% of the capital funds of
the bank.
III. Any finding to the effect that the total bank assets, on a going concern basis, are no longer adequate
to cover the total claims of creditors.

A. I only
B. I and II only
C. II and III only
D. I, II, and III

A BSP accredited external auditor must report to the BSP any material finding which will reduce the
capital funds of the bank by at least 1%, including those cases that were resolved during the period of
audit. (Section 4 of BSP Circular No. 245, Series of 2000)

93. All banks are required to prepare the Financial Reporting Package (FRP). The FRP composed of the
balance sheet, income statement and supporting schedules shall be prepared on a solo and consolidated
basis. Solo basis shall refer to the combined financial statements of the
A. Head office and subsidiaries
B. Head office and branches/other offices
C. Parent bank, head office, and subsidiaries
D. Parent bank and subsidiaries

94. Within how many banking days after the end of the reference quarter should banks submit their
consolidated FRP to the BSP?
A. 10
B. 20
C.15
D. 30

95. Within how many banking days after the end of the reference month or quarter should banks submit
their solo balance sheet and solo income statement to the Bangko Sentral ng Pilipinas?

A. 10
B. 20
C.15
D. 30
COMMISSION ON AUDIT (COA)

96. This Constitutional Commission has the power, authority, and duty to examine, audit, and settle all
accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property,
owned or held in trust by, or pertaining to, the government, or any of its subdivisions, agencies, or
instrumentalities, including government-owned or controlled corporations and recommend measures to
improve the efficiency and effectiveness of government operations.

A. Securities and Exchange Commission
B. Insurance Commission
C. Commission on Audit
D. Bureau of Internal Revenue

97. The COA is composed of
A. A chairman and two (2) commissioners.
B. A chairman and three (3) commissioners.
C. A chairman and four (4) commissioners.
D. A chairman and five (5) commissioners.

The COA is composed of a chairman and two (2) commissioners. Together they are called the
"Commission Proper."

98. The COA Chairman and the two (2) commissioners shall be appointed by the President of the
Philippines with consent of the Commission on Appointments for a term of

A. 5 years B. 6 years

C. 7 years D. 9 years


99. Which of the following is not one of the principal duties of the COA?

A. Keep the general accounts of the government and preserve the vouchers and supporting papers
pertaining thereto.

B. Maintain price stability conducive to a balanced and sustainable economic growth.
100

C. Promulgate accounting and auditing rules and regulation including those for the prevention and
disallowance irregular, unnecessary, excessive, extravagant or unconscionable expenditures, or uses of
government funds and properties.

D. Submit to the President of the Philippines and congress within the time fixed by law, an annual
report covering, financial condition and operation of the government.

To maintain price stability conducive to a balanced and sustainable economic growth is the primary
objective of the Bangko Sentral ng Pilipinas.

100. The COA conducts a comprehensive audit that includes

A. Financial and compliance audits.
B. Compliance and performance audits.
C. Financial and financial-related audits.
D. Financial, compliance, and performance audits.


 1 C 26 B 51 D 76 B
2 D 27 B 52 C 77 C
3 D 28 D 53 A 78 D
4 B 29 D 54 A 79 D
5 A 30 C 55 B 80 A
6 A 31 A 56 A 81 D
7 A 32 B 57 C 82 D
8 C 33 B 58 A 83 C
9 C 34 A 59 D 84 D
10 B 35 B 60 B 85 A
11 D 36 D 61 B 86 B
12 B 37 A 62 B 87 A
13 A 38 A 63 D 88 A
14 D 39 D 64 C 89 D
15 D 40 B 65 A 90 B
16 B 41 B 66 D 91 C
17 B 42 B 67 D 92 C
18 A 43 B 68 B 93 B
19 A 44 C 69 D 94 D
20 A 45 A 70 A 95 C
21 A 46 A 71 C 96 C
22 C 47 C 72 D 97 A
23 D 48 C 73 A 98 C
24 D 49 A 74 A 99 B
25 B 50 A 75 B 100 D